The Trust is a securitization structure consisting of senior securities (Preferred A Units) held by the public and subordinate securities (Mackenzie Units) held by Mackenzie. The Trust loans money to Mackenzie through a Secured Note, bearing 6% interest, to pay selling commissions to dealers.

The principal asset of the Trust is the Secured Note, however, the Trust also receives a portion of Mackenzie's management fees in return for the note.

The Mackenzie Income Trust was initially able to raise money from the following sources:

• Approximately $200 million from the public for the purchase of Preferred A units
• $200 million from Mackenzie Financial Corporation in return for ordinary units

Therefore, there are two classes of units for the MIT:

Preferred A Units. These units were sold to the public through dealers at $25.00/unit. The payment was required in two parts: $15.00 due on April 06,1998 and $10.00 due on November 30, 1998.

The approximate rate of return for the Preferred A Units is as follows:

• Units held in registered plans: fixed rate of return of 6.11%
• Units held in non-registered plans: rate of return will fluctuate from 6.34%-6.69%

The rate of return for these securities held in open accounts varies depending on the performance of the underlying assets of the Trust. A stronger cash flow would accelerate the principal repayment and lower the future interest income.

Preferred A Units expire December 31, 2002. (See Expiration)

Mackenzie Units. These units were funded with monies from Mackenzie Financial Corporation. The excess cash flow, that is not designated for Preferred A Units, will go to Mackenzie Financial Corporation.

The Trust's cash flow is used to pay quarterly distributions of $1.5048/unit to Preferred A Unitholders. These distributions consist of both income and return of principal, with the residual cash flow distributed to Mackenzie.